The Economic Forces Driving Fintech Adoption Across Countries

16 Pages Posted: 12 Feb 2020

See all articles by Jon Frost

Jon Frost

Bank for International Settlements; De Nederlandsche Bank; University of Cambridge - Cambridge Centre for Alternative Finance

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Date Written: February 4, 2020

Abstract

Fintech is being adopted across markets worldwide - but not evenly. Why not? This paper reviews the evidence. In some economies, especially in the developing world, adoption is being driven by an unmet demand for financial services. Fintech promises to deliver greater financial inclusion. In other economies, adoption can be related to the high cost of traditional finance, a supportive regulatory environment, and other macroeconomic factors. Finally, demographics play an important role, as younger cohorts are more likely to trust and adopt fintech services. Where fintech helps to make the financial system more inclusive and efficient, this could benefit economic growth. Yet the market failures traditionally present in finance remain relevant, and may manifest themselves in new guises.

Keywords: fintech, digital innovation, financial inclusion, financial regulation

JEL Classification: E51, G23, O33

Suggested Citation

Frost, Jon, The Economic Forces Driving Fintech Adoption Across Countries (February 4, 2020). BIS Working Paper No. 838. Available at SSRN: https://ssrn.com/abstract=3535904

Jon Frost (Contact Author)

Bank for International Settlements ( email )

Basel
Switzerland

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

University of Cambridge - Cambridge Centre for Alternative Finance ( email )

10 Trumpington Street
Cambridge, CB21QA
United Kingdom

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